High rates slowed down bank lending in July–BSP
FILE PHOTO: A logo of Bangko Sentral ng Pilipinas (Central Bank of the Philippines) is seen at their main building in Manila, Philippines March 23, 2016. REUTERS/Romeo Ranoco
The growth in lending activities of the Philippines’ large banks slowed for the fourth straight month to 7.7 percent in July as the Bangko Sentral ng Pilipinas (BSP) observed waning pent-up demand as well as the impact of the most aggressive monetary policy tightening in the region on borrowing appetite.
Preliminary data at the BSP pegged total outstanding loans, net of short-term loans to the central bank, at about P11 trillion at the end of July.
Tight monetary stance
Lending growth in July was weaker than the 12 percent observed in the same month last year and the 7.8 percent recorded last June.
“The growth in bank lending has continued to ease in line with the prevailing tight monetary policy stance of the BSP,” the regulator said in a statement.
“Looking ahead, the BSP will continue to ensure that domestic liquidity and credit dynamics remain consistent with its price and financial stability objectives,” it added.
Compared to June data when outstanding loans amounted to P10.99 trillion, bank lending increased by 0.6 percent.
Last July, lending to Philippine residents grew by 7.7 percent to a net of P10.69 trillion.
Likewise, this was slower than the growth rate of 7.9 percent in June when residents owed banks a total of P10.67 trillion.
Of the amount lent to residents as of July, loans granted to businesses grew by 6.2 percent to P9.55 trillion. This was also a slower growth rate compared to the 6.3-percent growth in June when outstanding loans for production activities were pegged at P9.55 trillion. INQ
